Why are payment declines so high for online transactions?
As any eCommerce merchant is aware, cart abandonment is a major issue—and a major cause of lost revenue. But declined authorization attempts are also a big contributor to the lower conversion rates that eCommerce businesses grapple with. What are the factors leading to higher payment decline rates online? Read on to find out.
Many issues can prohibit an online transaction from going through at the initial authorization attempt. These include:
- Incorrect or outdated payment card and account information
- Insufficient funds
- Network unavailability
- The issuer’s unspecified “Do not honor” declines
- The merchant’s fraud and risk mitigation tools
- The card networks’ fraud and risk mitigation tools
- The issuer/processor’s fraud and risk mitigation tools
Every bullet on this list can be a legitimate reason for a card decline. However, the ambiguity and misalignment that is common among all entities involved in a payment transaction often lead to transactions that simply should not have failed in the first place. These false declines (or false positives) are a revenue sucker, costing eCommerce businesses in the U.S. $8.6 billion in 2016.
So what can an eCommerce business like yours do about it? The best route to take is one that involves your payment processing provider. Discuss the strategies your processor is using to solve conversion challenges. A payments data-driven approach is one of the most effective ways to increase approvals, drive conversions, and improve online payment success.
As you look to improve the conversion rates for your eCommerce business, it’s worth taking in a bigger picture view that only a leading payment processing partner can offer. To learn more about what you can do to reduce declined authorizations and drive profit for your eCommerce business, download our new eBook.